Alex invested an amount of $500 for two years.
Alex invested an amount of $500 for two years. Find the rate of compound interest that will fetch him an amount of $83.20 at the end of two years?
Answer/Solution
8%
Steps/Work
Let the rate of interest be R% p.a.
500[1 + R/100]^2 = 583.20
[1 + R/100]2 = (583.20)/500
= 11664/10000 = [108/100]2
[1 + R/100] = 108/100
R=8%
Answer is A
500[1 + R/100]^2 = 583.20
[1 + R/100]2 = (583.20)/500
= 11664/10000 = [108/100]2
[1 + R/100] = 108/100
R=8%
Answer is A